This follows Lagarde's comments yesterday here. The main takeaway is that she said that the ECB is here to "normalise" the spreads, not close them. That is just purely semantics as it means the same thing. For now, European bond markets are heeding the central bank message with the 10-year Italian and German bond yields spread seen at 206 bps:
That's a significant climb down from the highs of around 253 bps earlier this week but still some ways off ECB policymaker Visco's suggestion that it should be in between 100-150 bps.
